Daily Digit: Prices jump 1.7 percent

June 18 - U.S. consumer prices, excluding food and energy, rose 1.7 percent in the 12-months through May, which should ease Federal Reserve fears of a slowing economy. Conway G. Gittens reports.

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The Daily Digit is 1.7 percent.
U.S. consumer prices, excluding food and energy, are up 1.7 percent for the 12 months including May. The biggest gains were all housing related and a big jump in airline fares was also a factor.
The so-called core rate favored by the Federal Reserve had been stagnant for some time, causing worry the economy was actually shifting into lower gear.
At 1.7 percent, the 12-month inflation rate is still below the Fed's 2 percent target, but at least suggests the economy is heading in the direction the Fed wants it to. Higher inflation and a stronger economy could make the Fed more comfortable in removing some of the extra stimulus put in place to help the economy stabilize after the financial crisis and subsequent recession.
The Fed is not expected to start scaling back its $85 billion a month bond buying program until the fall, but may provide some clues after a two-day meeting concludes on Wednesday.

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